BILL NUMBER: SB 702	CHAPTERED  10/10/99

	CHAPTER   935
	FILED WITH SECRETARY OF STATE   OCTOBER 10, 1999
	APPROVED BY GOVERNOR   OCTOBER 10, 1999
	PASSED THE SENATE   SEPTEMBER 7, 1999
	PASSED THE ASSEMBLY   SEPTEMBER 3, 1999
	AMENDED IN ASSEMBLY   JULY 15, 1999

INTRODUCED BY   Senator Peace

                        FEBRUARY 24, 1999

   An act to amend Sections 30163 and 30436 of the Revenue and
Taxation Code, relating to taxation, and declaring the urgency
thereof, to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 702, Peace.   Cigarette tax.
   (1) The Cigarette and Tobacco Products Tax Law requires that an
appropriate stamp be affixed to, or that an appropriate meter
impression be made upon, each package of cigarettes prior to
distribution, and prohibits any stamping or metering of packages of
cigarettes unless those packages comply with federal labeling
requirements for cigarettes to be sold within the United States.
Existing law requires the State Board of Equalization to revoke the
license issued to a distributor that is determined to be in violation
of these stamping or metering requirements.
   This bill would additionally prohibit any stamp or meter
impression from being affixed to, or made upon, packages of
cigarettes if the package is labeled for use outside the United
States, has been altered, or was imported in violation of federal
law, as specified.  By creating a new crime in the form of a
misdemeanor for a violation of these requirements, this bill would
establish a state-mandated local program.  The bill would also
provide for the forfeiture of the cigarettes in packages that are in
violation, and provide that a violation of those requirements shall
constitute unfair competition.
  (2) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state.  Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   (3) The bill would declare that it is to take effect immediately
as an urgency statute.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 30163 of the Revenue and Taxation Code is
amended to read:
   30163.  (a) Except as otherwise provided in this section, an
appropriate stamp shall be affixed to, or an appropriate meter
impression shall be made on each package of cigarettes prior to the
distribution of the cigarettes.
   (b) No stamp or meter impression may be affixed to, or made upon,
any package of cigarettes if any one of the following occurs:
   (1) The package does not comply with all requirements of the
Federal Cigarette Labeling and Advertising Act (15 U.S.C. Sec. 1331
and following) for the placement of labels, warnings, or any other
information upon a package of cigarettes that is to be sold within
the United States.
   (2) The package is labeled "For Export Only," "U.S. Tax Exempt,"
"For Use Outside U.S.," or similar wording indicating that the
manufacturer did not intend that the product be sold in the United
States.
   (3) The package, or a package containing individually stamped
packages, has been altered by adding or deleting the wording, labels,
or warnings described in paragraph (1) or (2).
   (4) The package was imported into the United States after January
1, 2000, in violation of Section 5754 of Title 26 of the United
States Code.
   (c) Pursuant to its authority under Section 30148, the board shall
revoke the license issued to a distributor that is determined to be
in violation of this section.
   (d) A violation of subdivision (b) shall constitute unfair
competition under Section 17200 of the Business and Professions Code.

  SEC. 2.  Section 30436 of the Revenue and Taxation Code is amended
to read:
   30436.  The following property, upon seizure by the board, is
hereby forfeited to the State of California:
   (a) Cigarettes or tobacco products transported upon the highways,
roads or streets of this state in violation of the provisions of
Section 30431 or Section 30432.
   (b) Cigarettes not contained in packages to which are affixed
California cigarette tax stamp or meter impressions or tobacco
products upon which the tobacco products surtax has not been paid,
which are offered for sale, possessed, kept, stored or owned by any
person with the intent of the person to sell the cigarettes or
tobacco products without payment of the taxes imposed by this part.
   (c) Any cigarette or tobacco product vending machine, together
with the cigarettes, tobacco products, money or other contents
thereof, which has been loaded in whole or in part with packages of
cigarettes which do not have California cigarette tax stamps or meter
impressions affixed or tobacco products upon which the tobacco
products surtax has not been paid.
   (d) Cigarettes contained in packages that are stamped or metered
in violation of Section 30163.
  SEC. 3.  No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only costs that may be incurred by a local agency or school district
will be incurred because this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIIIB of the California Constitution.
  SEC. 4.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect.  The facts constituting the necessity are:
   In order for the State Board of Equalization to properly enforce
the Cigarette and Tobacco Products Tax Law, it is necessary that this
act take effect immediately.
